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Facts
The assessee purchased an immovable property for Rs. 1,10,00,000/- without filing a return for AY 2016-17. The case was reopened, and the entire investment was treated as unexplained.
Held
The Tribunal held that in cases of co-purchasers, the addition cannot exceed the individual assessee's share. It was also noted that authorities disbelieved documents without independent inquiry.
Key Issues
Whether the entire investment in the property should be added to the assessee's income when it was co-purchased, and whether the authorities properly examined the source of funds.
Sections Cited
250, 147, 144, 144B, 148, 142(1), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
(Assessment Year: 2016-17) Rajesh Laxmichand Jain Income Tax Office, Ward 41(3)(3) 188, Squarter Colony, Malwani Colony, Kautilya Bhavan, BKC, 41-43, Vs. Malad West – 400095 Maharashtra, Bandra West, Mumbai 400051 India PAN/GIR No.: ADZPJ4846K (Appellant) : (Respondent) Assessee by : Shri H D Save, Adv. Respondent by : Shri Annavaran Kasuri, SR. AR. Date of Hearing : 04.09.2025 Date of Pronouncement : 11.09.2025 O R D E R Per Arun Khodpia, AM:
The captioned appeal filed by the assessee against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short ‘ld. CIT(A)’), passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act'), dated 27.01.2025, for the Assessment Year (in short ‘A.Y.’) 2016-17, which in turn arises from the assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act passed by Assessment Unit, Income Tax Department (in short ‘ld. AO’), dated 15.02.2024.
(A.Y. 2016-17) Rajesh Laxmichand Jain 2. Brief facts of the case as recorde by Ld. CIT(A) are that, the assessee is an individual, had purchased an immovable property for a consideration of Rs. 1,10,00,000/- during the FY 2015-16 relevant to the AY 2016-17. The appellant did not file his return of income for the AY 2016-17. Therefore, on the basis of the information available on records the case was reopened by issue of notice u/s 148 of the Act on 30.03.2023. Notice u/s. 142(1) was issued from time to time. In response to the show cause notice issued on 09.02.2023 the appellant vide his reply dated 02.03.2023 submitted that he had purchased the property jointly with his wife for which loan of Rs.77,62,926/- was availed from Axis Bank apart from his own contribution of Rs.37,94,057/- and his wife's contribution being Rs.3,00,000/-. As per the assessment order dated 15.02.2024, the appellant submitted a copy of loan sanction order and did not furnish documentary evidence in respect of the source of fund of Rs.37,94,057/- being his own contribution for the purchase of the property. Thereafter, the assessment was completed u/s. 147 r.w. 144 of the Income Tax Act, 1961 on 15.02.2024 on an assessed income of Rs. 1,10,00,000/- treating the entire investment of Rs. 1,10,00,000/- in the property as unexplained investment u/s.69 of the Income Tax Act, 1961, in the absence of any sources and explanation of the investment in the said property.
(A.Y. 2016-17) Rajesh Laxmichand Jain 3. Matter carried before the first appellate authority, wherein the assessee has submitted details of source of investment, however Ld. CIT(A) observed that the documents produced before him do not explain satisfactorily the nature and source of money utilized for purchase of the immovable property for a consideration of Rs. 1,10,00,000/-. Accordingly, the addition made by Ld. AO was held and the appeal of assessee has been dismissed.
Being aggrieved with the order of Ld. CIT(A), assessee preferred an appeal before the ITAT assailing the ground of appeal as per appeal memo on record, which is under consideration in the present matter.
5. At the outset, Ld. Authorised representative (in short ‘Ld. AR’) of the assessee submitted that the decision of Ld. CIT(A) in the impugned order is suffering with certain errors, such as the assessee’s co-owner in the property purchased along with his wife having 50% share for each, however the entire sum has been added to the income of the assessee. It is submitted by the learned AR that the assessee had duly furnished the details of housing loan availed from Axis Bank (copy furnished in the paper book – page 86-88) to substantiate source of investment to the extent of Rs.77,62,926/- (Assessee’s Contribution Rs. 38,81,463/-). Also furnished the details for remaining source of fund for Rs.40,94,057/- (assessee’s share 37,94,057/-), includes loan from Vallabh (DB (A.Y. 2016-17) Rajesh Laxmichand Jain Shah) though a/c payee cheque. Further on perusal of assessee’s bank account with The Satara Sahakari Bank Ltd, the assessee had made all the payment from this account on 11.07.2015, 5.8.2015 and 27.08.2015 from the fund available in the said bank account on respective date. It was the submission that the assessee had made all the payment from legitimate and genuine sources therefore no addition u/s 69 of the Act is warranted. Besides, it is also submitted that the assessee is a co-owner in the property purchased, the entire addition in asseseee’s hands is arbitrary and uncalled for.
Per contra Ld. Sr. DR strongly supported the orders of revenue authorities. But on perusal of documentary evidence furnished, had agreed for setting aside the matter to the file of Ld. AO for fresh adjudication after verification of source of funds.
Having considered the rival submission, on perusal of material available on records and copies evidence for source of investment by the assessee, we are of the view that in case of co-purchasers the addition can not exceed the share of individual assessee, further about the source of funds, without any independent enquiry, the authorities has disbelieved the documents and declarations by the assessee, thus, to meet the ends of justice, without dealing with the merits of the case, we find it appropriate to set aside the impugned order of Ld. CIT(A), (A.Y. 2016-17) Rajesh Laxmichand Jain restore the matter back to file of ld. AO for verification of evidence showing source of investment by the assessee and to re-adjudicate the matter afresh.
Needless to say, the assessee shall be provided with reasonable opportunity of being heard in the set aside assessment proceedings.
Resultantly the appeal of assessee stands allowed for statistical purposes.
Order pronounced in the open court on 11.09.2025